Lockheed, Raytheon Win Air Force Contracts For New Nuclear Cruise Missile

Lockheed Martin [LMT] and Raytheon [RTN] received contracts Aug. 23 to mature designs for the Long Range Standoff Weapon (LRSO), a replacement for the U.S. Air Force’s aging, nuclear-armed, air-launched cruise missile (ALCM).

Each company has been awarded a 54-month contract valued at about $900 million for the program’s technology maturation and risk reduction (TMRR) phase. When the contracts wrap up in 2022, the Air Force plans to pick one of the firms for LRSO’s engineering and manufacturing development, production and deployment.

"This weapon will modernize the air-based leg of the nuclear triad," Air Force Secretary Heather Wilson said. “Deterrence works if our adversaries know that we can hold at risk things they value. This weapon will enhance our ability to do so, and we must modernize it cost-effectively.”

In June, Air Force Gen. John Hyten, the head of U.S. Strategic Command, said that ALCM was having “significant reliability challenges,” underscoring the need to develop LRSO. The Air Force plans to start fielding the new missile in the late 2020s. Air Force bombers, including the new Northrop Grumman [NOC] B-21 Raider, will carry LRSO.

“The LRSO missile will ensure the bomber force continues to hold high-value targets at risk in an evolving threat environment, including targets deep within an area-denied environment,” said Gen. Robin Rand, the head of Air Force Global Strike Command.

Boeing [BA], which built ALCM, expressed disappointment that it did not receive an LRSO contract.

“We look forward to learning more from the Air Force regarding the decision,” Boeing spokeswoman Didi VanNierop said.

Lockheed and Raytheon plan to perform their work in Orlando, Fla., and Tucson, Ariz., respectively. The Air Force’s LRSO program office is located at Eglin Air Force Base in Florida.

"Lockheed Martin's proven experience in cruise missile and strategic systems technologies will provide the most reliable, capable, sustainable and affordable program in defense of our nation and our allies,” said David Helsel, LRSO program director at Lockheed Martin Missiles and Fire Control.

Raytheon had no immediate comment.

The announcement came just two days after the Air Force awarded TMRR contracts to Boeing and Northrop Grumman to mature designs for the Ground Based Strategic Deterrent (GBSD), a replacement for the land-based, nuclear-armed Minuteman III intercontinental ballistic missile.





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